You live in a town with 300 adults and 200 children, and you are...

You live in a town with 300 adults and 200 children, and you are thinking about putting on a play to entertain your neighbors and make some money. A play has a fixed cost of $2,000, but selling an extra ticket has zero marginal cost. Here are the demand schedules for your two types of customers:

To maximize profit, you would charge

for an adult's ticket and

for a child's ticket. Total profit in this case would be

.

The city council passes a law prohibiting you from charging different prices to different customers.

Now you set a price of

for all tickets, resulting in

in profit.

Suppose the fixed cost of the play were $2,500 rather than $2,000.Complete the following sentences indicating how this would change your answers to the previous parts.

In the presence of price discrimination, the adult price of a ticket would remain the same/increase/decrease   , and the child price would    . Total profit would    to

.

If price discrimination were banned and the monopolist continued to produce the play no matter what the profit, the price of a ticket would increase   , and total profit would  rise/fall  to

.